U.S. Government and Oil Company Trade Blame 12 Years into Gulf of Mexico Oil Leak that Could Last 100 Years

X marks the site of the Taylor leak, with spill trailing to the right (photo: NASA)

By Sabrina Canfield, Courthouse News Service

NEW ORLEANS (CN) - An oil company whose leaky well could discharge oil into the Gulf of Mexico for the next century hasn't tried hard enough to stop the leaks, the federal government said in court papers this week.

Taylor Energy Company sued the federal government in January saying the feds won't return $400 million it set aside to stop the leak.

Government attorneys in response Tuesday asked the U.S. Court of Federal Claims to dismiss Taylor's lawsuit under the pretext the company hasn't done enough to fix its wells.

The leak, which is often visible from air as a miles-wide sheen across the Gulf, began in 2004 after an underwater mudslide created by Hurricane Ivan toppled a Taylor-owned platform and submerged 28 wells under sediment and mud measuring 100 feet.

Taylor says nothing can be done about the trails of oil and regulators say if nothing is done the oil could go on streaming into the Gulf for another hundred years or more.

Taylor's lawsuit says the government hasn't made good on a 2008 agreement in which Taylor placed $666 million in a trust to pay for leak response services. The company says $432 million remains to be returned.

Taylor argued in its lawsuit that a 2009 report from federal regulators said removing contaminated soil from its well sites would cause more environmental harm than good, and thus the oil company stopped its remedial attempts to plug the leaking wells.

Since 2014, at least four members of Louisiana's congressional delegation have sent letters asking the Obama Administration to consider the company's settlement proposal, according to a story by the Associated Press.

The government instead ordered the company to work harder to clean up its leaks.

By Taylor Energy's estimates, the company has spent more than $480 million trying to contain the leaks, including $234 million from the trust.

In 2007, the government told Taylor to fix its buried wells. In an attempt, the company drilled "intervention wells" into nine of the 28 wells and stopped, ostensibly because continuing to drill was more risky to the environment than to let the wells leak oil.

In 2014, the company asked the Bureau of Safety and Environmental Enforcement, a division of the Interior Department, if it could skip drilling the remaining 16 wells and skip removing contaminated soil from the seafloor under the same premise that it would be worse for the environment than doing nothing. The agency disagreed and told Taylor Energy to keep trying.

Last year an Associated Press investigation into the oil leak revealed evidence the leak is worse than either the company or government previously reported. The AP's findings helped the Coast Guard develop a new leak estimate, which was 20 times higher than Taylor Energy's most previous estimate, according to a report from the Associated Press.

Watchdog group, SkyTruth, estimated last year, based on satellite images and Coast Guard pollution reports that between 300,000 and 1.4 million gallons of oil have spilled from Taylor's site since 2004.

The Justice Department's filing this week said the leak averaged 123 gallons per day between July and December 2015 and 112 gallons per day between January and April 2016. By contrast, Taylor Energy estimated in a 2014 report it commissioned that the sheens averaged less than four gallons per sighting.